[Here’s why Stellar’s price is soaring and XLM may soon fall]
Stellar Lumens (XLM) has been on a strong run lately, with prices rising for four days in a row to hit a new high since 2021 and rebounding more than 523% from last year’s lows. As a blockchain network focused on payments, Stellar's applications cover peer-to-peer payments, tokenization of physical assets, and cross-chain functions of fiat currencies and cryptocurrencies.
Stellar’s success stories include partnering with Circle to issue over $300 million in USDC, and partnering with MoneyGram to enable users to send and receive stablecoins at thousands of outlets. In addition, Stellar launched a tokenized fund with Franklin Templeton, attracting $430 million in assets, and other partners include Felix, Bitso and Fireblocks.
XLM’s rise is mainly driven by the following factors:
1. Crypto market bull market: The total market value exceeded US$3 trillion, and the market value of Bitcoin reached US$1.8 trillion, ranking among the top five assets in the world.
2. Increased market risk appetite: The fear and greed index rose to 88, and altcoins performed outstandingly under extreme greed. The Altcoin Seasonal Index is currently at 35 and further gains are expected.
3. Good news for Ripple: Ripple reached a settlement with the SEC lawsuit and was fined only US$250 million. The market expects that the Trump administration will be more friendly to encryption policies, further boosting market sentiment.
Technical analysis shows that XLM broke out of the long-term consolidation zone on the weekly chart, with the price rising above $0.20 and holding above the 50-week and 200-week EMA, while reaching the 50% Fibonacci retracement level. However, as it enters overbought territory, a pullback is possible in the short term, but the overall upward trend remains intact.
